Broadridge Financial Solutions, Inc.
Q4 2017 Earnings Call Transcript

Published: 10 Aug 2017

[Operator:]

Good morning. My name is Adrianne, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fourth Quarter and Fiscal Year 2017 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. I would now like to turn the call over to Mr. Edings Thibault. Please go ahead, sir.

[W. Edings Thibault:]

Thank you, Adrianne. Good morning, everybody, and welcome to Broadridge's fourth quarter and fiscal year 2017 earnings conference call. Our earnings release and the slide that accompany this call may be found on the Investor Relations section of broadridge.com. Joining me on this call this morning are Rich Daly, CEO; Jim Young, our Chief Financial Officer; and Tim Gokey, who is appointed as President, as announced last week. Before I turn the call over to management team, a few standard reminders. During today's conference call, we will be making forward-looking statements regarding Broadridge that involve risks. A summary of these risks can be found on the second page of the slides. We encourage participants to refer to our SEC filings, including our Annual Report on Form 10-K, for a complete discussion of forward-looking statements and risk factors faced by our business. We will also be referring to several non-GAAP financial measures, including adjusted operating income, adjusted EPS, and free cash flow. We believe these non-GAAP measures provide investors with a more complete understanding of Broadridge's underlying operating results. An explanation of our use of these non-GAAP measures and reconciliations to their comparable GAAP measures can be found in the earnings release and in the earnings presentation. Let me now turn the call over to Rich Daly.

[Richard J. Daly:]

Thanks, Edings. Good morning to everyone on our call. Before I begin my update, I want to congratulate Tim on his well-deserved appointment to President. Tim joined Broadridge in 2010 as Head of Strategy with the mandate to help us to transform Broadridge from a company that was reliant on market factors to drive its growth to one that was more closely aligned with its clients and long-term demand trends. Since then, in his role as COO, he has led both our ICS and GTO segments and maintained that focus on driving growth. Tim has broadened our product offering, and a thought leader with our clients and he is a valuable partner in helping me to manage and grow our business, so congratulations Tim and I look forward to continuing our partnership over the coming years.

[Timothy C. Gokey:]

Thank you, Rich.

[Richard J. Daly:]

Okay. Now, let's start. We have a lot of ground to cover this morning. I will begin with some highlights of fiscal year 2017. Tim, will then provide an overview of our segments, then hand it off to Jim for review of our financials and then I will close with some thoughts on Broadridge's overall direction. We'll begin on slide 4 of our presentation slides. We had a strong end to a very good fiscal year 2017. Our fourth quarter results benefited from strong stock record growth, an elevated level of event-driven activity – excuse me, and continued momentum in our GTO business. For the full year, Broadridge delivered total revenue growth of 43%. Recurring revenues grew 29% including 6% organic growth, and adjusted EPS grew 15% to $3.13; a very good year. I'm especially pleased to note that our fiscal year 2017 results enabled Broadridge to achieve the three-year objectivities we laid out at our last Investor Day in December 2014. Let's go over those three-year results. Our objective was to grow our recurring revenues by 7% to 10% per year. We achieved a compound annual recurring revenue growth rate of 14%, or 7% without the acquisition of NACC. We also targeted adjusted earnings growth of 9% to 11%. Our adjusted earnings CAGR over the past three years has been 11% or 9% excluding NACC. We also targeted 50 basis points to 60 basis points per year of margin expansion and we've achieved that goal as well on a like-for-like basis. The reason we set these three-year objectives is to help us maintain our focus on mid-term versus short-term value creation and we look forward to issuing a new set of objectives that will take us through fiscal year 2020 at our upcoming December Investor Day. Now let me turn to my favorite topic, record closed sales. Broadridge reported record closed sales of $188 million in fiscal 2017, up 25%. Fourth quarter closed sales were $64 million, up 12% year-over-year, and we expect continued momentum as we enter fiscal 2018. One of our larger deals on the quarter was an agreement to manage the global back office operations of a top 15 U.S. investment bank. With more than 60 clients on our current technology platforms including more than 30 that, like this client, utilize our full back-office managed services solutions, Broadridge continues to cement its position as a leading capital markets infrastructure utility. Other notable deals in the quarter include the sale of portfolio management solutions to an alternative asset manager and continuum of sales of our financial advisor solutions. I'm also pleased to see a growing number of sales coming out of our Broadridge Customer Communications business, which now includes NACC. Not only have sales exceeded our expectations for the first year, but the pipeline of potential deals is full, which bodes well for putting that business on a growth track earlier than we had anticipated. Lastly, we would be remiss if we didn't highlight a key win back of a major proxy client. This is a client that we lost a few years ago and have worked hard since to win back. Looking forward, our pipeline is strong, even after a record sales year and not counting the incremental opportunities we are seeing from BRCC. Our pipeline at the end of 2017 was stronger than it was at the beginning of 2017. So, record sales in 2017 and a stronger pipeline to begin 2018. Those are both positive parameters about our future growth. Broadridge also benefited from a record – I'm sorry, from a return to healthy levels of market growth in the form of strong stock record growth, healthy interim record growth, and higher trading volumes in 2017. Our focus on generating sales-led growth is very strong. These volumes are a small part of our growth, and it was in the past. But the positive long-term trends they reflect remain a component of our long-term growth story. Now, let's turn to NACC. With a full year of owning that business now under our belt, I am pleased with the overall status of this investment. On a tactical level, we have made great strides in integrating the business, exceeded our initial sales expectations, and our pipeline is strong. On a strategic level, Broadridge is making good progress against the short-term, mid-term and long-term goals we cited at the time of acquisition. Short-term, the integration continues to go well and we are on track to realize our $20 million synergy target. Mid-term, this is where my comments on a healthy pipeline really come into play. We've seen significant interests from large in-house clients in learning how we can help them reduce their overall cost of printing and distribution and manage their transition to digital. There remains a lot of work to be done to translate our pipeline into closed sales, but I really like where we stand today. Long-term, our goal is to help enable our clients to digitalize their key communications and leverage the value of our network to accelerate that transition. We are well underway in building out our capabilities around the Broadridge Communications Cloud, and are getting very positive feedback from key clients, channel partners, and cloud players about our strategy. Early days here, but again, I like our progress. While we met our adjusted EPS contribution objectives, NACC's 2017 top-line results were lower than we anticipated, mostly as a result of lower volumes at a single large customer that we discussed last quarter. Given our recent closed sales and pipeline, I am optimistic that we will make up that lost ground by 2019. We also made two small buy versus build tuck-in acquisitions in fiscal year 2017. One, to strengthen our ability to serve the wealth management market; and the second, to extend our capabilities in post-trade processing and controls. We also invested last fall to accelerate our ability to bring blockchain capabilities to the proxy market by acquiring the technology assets of Inveshare. Finally, and as always we made investment to new product development in areas like tax reporting, blockchain and other capabilities as part of our ongoing operating expenses. More recently, we are also making additional investments to implement efficiency measures designed to flatten our organization and make us more nimble and client-focused. After a strong fiscal year, Broadridge is exciting 2017 with good momentum. The combination of another year of record closed sales, continuing strong fundamentals in our franchise businesses and ongoing investments, we must well position to deliver another Broadridge type of year in 2018 and well positioned to sustain our growth beyond 2018. Our board's confidence in our outlook is reflected in the increase in our annual dividend amount by 11% to $1.46 per share. A rising dividend is a key component of long-term shareholder value creation. So I am proud to note that Broadridge has raised its dividend every year since becoming a public company, and that fiscal 2018 will be the sixth consecutive year of a double-digit increase. Finally, a word on guidance, as I noted we expect 2018 to be another Broadridge type of year, which means we expect another year of mid-single-digit recurring fee revenue growth and double-digit EPS growth. Our fiscal year 2018 guidance calls for just that; 4% to 6% recurring fee revenue growth, continued margin expansion, 15% to 19% adjusted EPS growth and strong sales. Let me now turn the call over to Tim for a review of our business segments.

[Timothy C. Gokey:]

Thank you, Rich. We're now on slide 5. As Rich noted, Broadridge performed well in fiscal 2017 with strong growth in both ICS and GTO. I am especially pleased with performance of the GTO business in fiscal 2017. Our (13

[James M. Young:]

Thanks, Tim. And good morning, everyone. I'll make a few callouts to begin. First, our performance, we finished off fiscal 2017 in strong fashion with very healthy, organic growth and strong sales. We laid the foundation for another year solid top-line and bottom-line growth in part due to our ongoing investments in the business. Second, guidance

[Richard J. Daly:]

Thanks, Jim. I'm on slide 13 of the presentation, let's review the key points of our call. We delivered a strong fiscal year 2017, with recurring revenue growth of 29%, adjusted EPS growth of 15%, and most importantly record closed sales of 25%. Those results mean that we were successful in delivering on the three objectives we laid out at our last Investor Day achieving a recurring revenue CAGR of 14% and adjusted earnings CAGR of 11%. Broadridge increased its dividend for the 10th consecutive year, underscoring our commitment for long-term shareholder value creation. And our 2018 guidance calls for more of the same, recurring revenue growth of 46%, double-digit EPS growth and strong closed sales, in other words another typical Broadridge year. Looking beyond 2018, I believe Broadridge is again in a position than ever to sustain its growth. Let me tell you why I'm very confident. If you recall our Investor Day in 2014, we laid out three key areas of investment. We said we would invest in our technology organization, since then we have invested in our technology team and platforms, to the point where we are now running the do facto standard back-office utility for more than 30 clients and working to integrate blockchain capabilities and cloud based communications into our core product offerings. We said we would invest in strengthening and enhancing of product portfolio. Over the past several years, we have continued to make tuck-in acquisitions to broaden our global product portfolio and are continuing to build world-class managed services capabilities by leveraging our presence in the U.S., India and elsewhere. Finally, we have continued to build the Broadridge brand by investing in our sales and marketing capabilities. As a result of those investments, Broadridge is now a much stronger position than it was three years ago. Our reputation among our clients used to be that of a trusted vendor who could efficiently manage existing technology. Now, we are increasingly being approached by our clients, as a partner who can help them adopt new technologies, and transform their business models. That puts Broadridge, in a much stronger position to pursue the large market transformational opportunities that we see around mutualization and digitization. We'll share more of how we intend to pursue those opportunities at our Investor Day. But for now, let me briefly cover a few areas where we think we can drive significant value for our clients. As financial services institutions look to transform and utilize their mission critical, but non-differentiating back office functions, Broadridge is the only player with the proven technology, scale, innovation, experience, and most importantly, the clients to achieve this and meet their needs. Building on that position as an industry utility, we are well positioned to add additional layers of value, by driving network benefits to our clients. That should lead to additional opportunities, around fastest settlement time, and even the ability to create greater liquidity and fixed income markets. We also see significant opportunities to continue to expand our post trade utility franchise, outside of North America. We are working with mutual funds and regulators that continue to drive increased engagement, and cost efficiencies into their communications with their fund holders. We also see additional opportunities to help them streamline their operations. And I see a significant long term opportunity to help our clients navigate the evolution of transactional communications from email and envelopes into a more dynamic and cloud based future. A more immediate step in realizing this objective will be to win existing print business from key large in-house players and with the pipeline we have built over the past year, I am more optimistic than ever about our ability to do that. Today, we have the depth and breadth of product opportunities, the depth of management talent and the depth of credibility with our clients to pursue these exciting opportunities. Anyone or more of them could contribute meaningfully to our overall growth. As I look out over the next few years, that's a great position to be in. Before I turn the call over to your questions, I want to thank more than 10,000 Broadridge associates for their work over the last 12 months. Their commitment to meeting or exceeding our clients' expectations is what the service profit chain is all about and is what drives the financial results that we reported this morning. Now let's open it up for your questions, Adrianne, please open the call up.

[Operator:]

The first question comes from the line of David Togut with Evercore SIS (sic) [ISI].

[David Mark Togut:]

Thank you. Good morning.

[James M. Young:]

Hi, David.

[Richard J. Daly:]

Good morning.

[David Mark Togut:]

I'd like to ask about the 2018 outlook. Perhaps you could drill down a little bit more on the 2% to 3% revenue growth guidance. I heard the call outs on kind of elevated event driven activity in 2017 and a big pickup in stock record growth. I'd just like to understand the 2% to 3% better particularly in light of the 25% growth in record closed sales in 2017.

[James M. Young:]

Sure, David. This is Jim. First just breaking down, we've got the recurring piece at 4% to 6% which is almost all organic and very much in line with our longer term organization growth. If you move to event, we had a very good event year, but as we said we think event is going to be flat. So, on a total revenue growth basis that will be a bit of a drag off of that 4% to 6%. And then the next piece is you layer in that distribution revenue which we're also saying will be down and there are a couple of factors in there. One is we had large contest activity in this past year that Tim mentioned that comes with it a lot of postage revenues given the mix of it. We don't anticipate that repeating, so that will drive a decrease in addition to some of the customer communications work we talked about, that also comes with high postage and that is going to have a slight contraction, so therefore that will come down and have an impact on total revenue. Just circling back to your final point on the closed sales; absolutely great closed sales. We'll get some benefit in 2018, but I think as we've been signaling for a while, even as we've had big sales, some of these larger deals we've been closing certainly have longer conversion times that may not show up until 2019. So, again we see accelerating revenue additions from sales in 2018 for sure with, we think, more impact coming even in 2019.

[Richard J. Daly:]

And Dave, I want you to add a little color of that as well. Jim pointed out that we've assumed a more moderate growth due to the historical averages, for the stock record and mutual fund interims and flat trading volumes. To be able to be in the position we're in right now to target, what we're targeting from 2019, assuming that is something we could have never done five plus years ago. And Dave, you've watched us for a quite some time now, and you know that what we're planning fiscal 2018, we're already thinking about 2019 and how we can deliver consistently, so that over any multi-year period, we still believe we're going to be a top total shareholder return performer. That's the way we like running the business.

[David Mark Togut:]

Understood. And just as follow-on to that Rich, given Jim's comments about the 2017 sales converting in 2019, should we expect to see you back in more of your historical revenue growth algorithm in 2019?

[Richard J. Daly:]

Well, because, as Jim also pointed out, because of the pass-throughs and with postage in here, you know that our strategy and a key part of why we did the NACC transaction is to be more relevant for the cloud players out there, with the most – and we now have more meaningful content than any other entity that does distribution. So the more successful at converting as we go forward, all right, which I really hope in 2019, we will be converting some volumes over. Okay, if that postage goes away, that would be a good thing. So, it's really the recurring fee revenue that really drives us here more than the total revenue as it relates to the pass-through.

[James M. Young:]

And Dave, just to finish out your question on the algorithm. One thing that is a little bit unique, as you look forward to 2019 is that loss rate that we've talked about, would tick up from 2% to 3% as a function of these known losses of BRCC. And so, that's absorbed in our – that 4% to 6% recurring revenue growth. And again, we've got, given the pipeline we're optimistic that, maybe, we can get that business in a growth mode sooner, which means as we think about that growth algorithm going forward, it would start – it would not be a drag to our growth as it is this year.

[Operator:]

The next question comes from the line of Peter Heckmann with D.A. Davidson.

[Peter J. Heckmann:]

Hi, good morning everyone. And I'm having just a little trouble reconciling some of the same issues. Can you quantify the dollar amount of the known losses at NACC? And when do you expect them to be fully be de-converted?

[James M. Young:]

Yeah. Pete, maybe just how that – we've talked about that loss rate going up from 2% to 3%. I would attribute most of that, if not all that percentage point to NACC. So, on a $2.5 billion base you would then for somewhere in the neighborhood of $25 million and that's probably a pretty good indication of it. In terms of that run-off, it will be a long way through by the end of 2018. Although we do anticipate some remnant still probably de-converting in 2019. But as we think about the sales that are coming on, hopefully that becomes, kind of, de minims in the overall growth algorithm.

[Timothy C. Gokey:]

And Peter, it's Tim Gokey. Just one thing that I wanted to add to it is that the vast majority of these losses which were known at the time of the acquisition represent business model changes for the clients rather than independent decisions to leave. So, examples would be a major client was acquired and another one that is changing its billing system provider. So those are not related to the service that is being provided by us is really related to things that are going on in those client businesses.

[Peter J. Heckmann:]

Okay. That's helpful. And then in terms of event driven, you said – you implied in your guidance is event driven will be down for the year. Are we talking kind of mid-single-digits, and then I think Rich did call out another major mutual fund family that announced that they are going out for a vote in fiscal 2018, which quarter do you expect that to hit?

[James M. Young:]

First off, on the overall question on event driven, we do see it down, very modestly low-single-digit type contraction – low- to mid-single-digit contraction. In terms of the large proxy we talked about, too early to give you a quarter, although as Tim mentioned filings out there, so you can start to maybe assume that it's first half barring any kind of major hiccup or change in plans.

[Richard J. Daly:]

It's very easy to delay a filing, all right. And I wouldn't say it happens with great frequency, but it can happen.

[Operator:]

The next question comes from the line of Chris Donat with Sandler O'Neill.

[Christopher Roy Donat:]

My question...

[James M. Young:]

Hey, Chris.

[Christopher Roy Donat:]

I wanted to ask Jim on the tax issue just because of the accounting change, it seems like it's something that should be largely recurring in nature, is that a fair way to think about it and would you have any insight on what it could be in 2019 in terms of the excess benefit from stock-based compensation or is it way too early to tell?

[James M. Young:]

Pete, that's a tough question. As we looked in the past three years, I read out those numbers kind of $40 million, $20 million, $40 million, in that range. There's some benefit that's been recurring for sure and if – as you know the key variables are stock price exercise level of options, a little bit of restricted stock, vesting with the bigger one is option. So, the things that we have to know and assume are a little bit around performance of shares, a little bit about what's going to be vested and available for exercise, and then the actual exercise activity that goes on. So, very difficult to project. Other than if I look at the trend, look at where we are, it looks like we'll have a meaningful contribution next year, given the number of options we have, we think that it continues to contribute going forward, but as I said very volatile, very difficult to forecast.

[Christopher Roy Donat:]

Understood, I appreciate identifying the key factors there. And then, separate issue, I want to congratulate Tim on the promotion, but then to ask Rich, the question is, just I'm curious why the timing now, is it – as you're working on the three-year plan or does it reflect the good work Tim has done in his various roles, just curious why now?

[Richard J. Daly:]

Well, as you know, prior to Tim, John Hogan was president, and I liked the structure first of all, all right. And it absolutely is a reflection for the contribution that Tim has made. And it's certainly anticipation of those contributions continuing as Tim and I work together over the next few years.

[Operator:]

Your next question comes from the line of Puneet Jain with JPMorgan.

[Puneet Jain:]

Yeah. Hi. Thanks for taking my question. Now that NACC is fully integrated, can you review your M&A strategy and if you'd be willing to do another relatively large acquisition beyond the usual tuck-ins?

[Richard J. Daly:]

Okay. So, in terms of NACC, we went out very clearly at the time we did the transaction. We have what we need in terms of content where it's close to 6 billion pieces of meaningful content to execute against our strategy. We're very confident that we're going to be able to grow the revenue of that business because the reaction from in-house, large in-house providers, think like major banks and major financial service companies that have an in-house operation, have been impressed by our overall strategy, which includes not only the very, very efficient distribution of the material as it exists today, a very, very efficient meaning of far better postal situation where we get about 95% at a nine-digit sort capability, which is real money. And then on top of that, okay, are very meaningful investments to enable us to be able to go to the cloud provider of their choice encrypted, secure, et cetera, is something where we're going to folks, where most people do what we do where most people do what we do are opposed to eliminating print. And we're going to folks with this strategy that says, we're coming here because we want to help you eliminate print faster and through our network, you may have a customer that's eliminated print with us somewhere else and we'll enable you to get to that customer and show them how they can eliminate print with you as well, getting to that network value we talk about. So, I don't really see the need for us to grow that part of the business through acquisition, if there is an opportunity on something in technology to enable the network benefits and the cloud benefits to happen faster, that's something we would certainly consider. And again you should be thinking tuck-in, nothing of any transformative nature.

[Puneet Jain:]

Got it. That's good explanation. And then given equity markets where they are, what do you expect for stock record growth this year? And just to confirm, you expect equity trade volume to be flat in fiscal 2018?

[Richard J. Daly:]

I'm going to provide a little color and then ask Tim to comment on this as well. I just called out earlier again Jim's comment about, we're looking at the volumes for next year, as part of the plan we gave you to be moderate, all right. Now, you can tell me better than I should be able to tell you what these markets are going to continue to do. If we're going to continue to have these fabulous returns for years to come, I would tell you that I would think stock record and interim growth et cetera, would continue to perform very, very nicely, all right. I think we're taking a prudent approach to giving the solid plans the next year, all right. And being modest in the way we're looking at stock record growth and interim growth. Jim why don't you talk about the flows and some of the other things we've done a far better job over recent year or so in trying to understand these better?

[James M. Young:]

Yeah, absolutely, and I do think that the key point here is that we believe that our stock record as it has been for the past decade is a long-term trend and that will continue with the help of overall equity markets and there may be short-term fluctuations as there has been in the past, but the long-term is very solid. Specifically, for the coming year as I described and as Tim described, we're really looking at historic averages for those and sort of playing this, sort of, right down in the middle of the fairway. There have been – there was a slowdown on the mutual fund flow side earlier in the year that is coming back and that seems to be much more in line with historic averages now than it was 12 months ago, and that's a positive. And so, we see this is something that we think is really just part of that long-term outplay. Obviously, if we were in the position of pure market prognosticators we'd be in the business side, but it's – we do think it'd be very positive over the long run.

[Richard J. Daly:]

Yeah. One point of a personal note. So, it's been 10 years of Broadridge, it's been almost four decades for me of the benefits of stock record growth and I'll tell you that, there are many times in my career that stock record growth mainly look a lot taller than and bigger than they actually are.

[Operator:]

Your final question comes from the line of Patrick O'Shaughnessy with Raymond James.

[Patrick J. O'Shaughnessy:]

Hey, good morning. Speaking of stock record position growth, I was curious how much of that 10% growth you saw in the fourth quarter came from winning back that one client that you mentioned?

[Richard J. Daly:]

The client is not live yet. So we'll be doing the conversion at the end of the year. So, there is absolutely nothing related to that.

[Patrick J. O'Shaughnessy:]

Okay. So upside in the future but not in the fourth quarter this year. And then question on expenses, and maybe this is for Jim, pretty big ramp in unallocated expenses in the fourth quarter this year? And it sounds like that's going to carry over into the first quarter of fiscal 2018. Can you provide a little bit more color on what some of those expenditures are and how you're able to ramp them up and then back down relatively quickly?

[James M. Young:]

Sure, Patrick. So in the fourth quarter you are seeing our investments ramp from the efficiency initiatives, which is a combination of both consulting costs as well as severance costs related to this. And as we said, we started doing this work over the summer. So some of it will fall into the first quarter and so you'll see more of the same type of expenses in Q1, and then complete this overall initiative.

[Richard J. Daly:]

Okay. And Patrick, this is Rich. You know that we are zealous of our commitment to the service profit chain here. And what we are doing here though, I think really does align very importantly with the fundamentals of the service profit chain, and looking at the organization and saying, over the last 10 years as we've grown, we've also grown in a number of tiers that we have in the organization. And in my heart of heart as an entrepreneur I really believe a flat organization where there is less layers between the customer and me is critical that we always listen to the customer. And Tim and the team have done a lot of work on this. I'm going to ask Tim to comment on just what we believe. Yeah there is going to be some expense here benefit, but the real thing is, is the flexibility we have and the responsiveness that we'll have with the customers going forward.

[Timothy C. Gokey:]

Absolutely. And I think the other element that I would add to this is, we're going to be talking at our Investor Day about our outlook going forward and how we are realigning the business further around some of the biggest growth trends that we see. And some of these organizational changes are really getting in front of that and aligning the organization around phasing off against our biggest client opportunities. And then within that, as Rich said, we're really working to flatten our organization to get closer to the client to make it more nimble. We did this last year with our GTO organization, and in that effort we reduced that organization by three layers, we increased average span of control. We had a significant portion of associates are being promoted and really improved the overall organizational health. And we saw success in that effort, we're bringing that to the rest of the company now. And we're very pleased with what we think, that's going to do for us going forward, both in terms of just the overall health of the organization and then in particularly with our alignment around our biggest opportunities.

[Patrick J. O'Shaughnessy:]

That's great.

[Richard J. Daly:]

And Tim, I should have said this when I was asked about your promotion. One of the things that both I and the board have been very, very excited and impressed is, today Broadridge has two great segments. I mean what happened in GTO, and the very specific focus that Tim put into GTO to enable that business to contribute the way it contributed today. But more importantly, when we talk about the industry's need to take out cost and neutralize cost et cetera, GTO is well on its way to creating a franchise standard that we have in proxy and in our communications segment. And, so, I'm glad that Tim also pointed out for the upcoming Investor Day, because what I tried to cover in the call today was tangible things. In the past all of you asked me, well, tell me the things that can happen. Managed services can move the needle around here. Making fixed income making more happen that can move the needle around here. What we're doing in the mutual funds, and working with the regulators to make communications more efficient, as in less costly and better for investors. And this is just a tee off to how you'll see we're building the foundation, and what Tim and the team have done to build the foundation, as we roll out on Investor Day. So, I don't want to wish my life away here, but we're really excited and we really hope you will mark your calendar. We think it's going to be well worth the time to be with us on Investor Day come December.

[Patrick J. O'Shaughnessy:]

Thank you.

[Operator:]

I would like to return the call over to Mr. Thibault for closing remarks.

[W. Edings Thibault:]

Thank you, Adrianne. Before we close, let me remind you that we will be hosting an investor lunch as we generally do, to discuss our results at our offices in New York next Wednesday, August 16. If you would like to attend, please do let me know, and we'll conclude on that note. Thank you all very much for your interest and ownership in Broadridge and choose to have a great day.

[Operator:]

This concludes today's conference call. You may now disconnect.